Tennessee to save billions with health care reform, study finds

Tennesseans will save $2.7 billion on health care insurance when health care reform is in place in 2014, according to a new study.

That total will come as an estimated 664,100 Tennesseans will be eligible for premium tax credits, the study says.

The credits will be available from the federal government to people and families who make up to four times the national poverty level, up to $43,320 for an individual and up to $88,200 for a family of four. The amount of the credit will be based on income.

Money from the credits will flow directly from the government to the health plan the person or family chooses through new health care exchanges that will be available in 2014. So, these funds will not be available to spend on anything other than health insurance premiums.

The new study is from Families USA, a Washington health care consumer advocacy group that reviewed the tax credit's effect on citizens in nearly every state.

The study says the tax credits will go to 29 million mostly middle-income Americans and total $110 billion in reduced taxes. Families USA executive director Ron Pollack called the premium tax credits "one of the largest middle-income tax cuts in history."

"The tax cut will not only put significant extra cash in families' pocketbooks but it will ease the burden of families' growing health care costs," Pollack said.

Health reform's detractors say there is a better way. In his new book, "Fresh Medicine," Tennessee Gov. Phil Bredesen calls reform a "stunning disappointment" for simply adding people to an existing system and likened it to an old house that is in disrepair.

"But rather than rolling up our sleeves and strengthening the beams and joists, we choose to tack on a cobbled-together addition on the back, slap a coat of paint on everything and pronounce it fixed," Bredesen wrote.

Working Tennessee families will get 94 percent of the credits, the study says. However, as the program is based on a sliding scale, most of the actual dollars from the credits will go to those families with incomes at or below 200 percent of the poverty level, a maximum of $44,100 in total income for a family of four or $21,660 for an individual.

Only 6 percent, or 36,600, of Tennesseans who are unemployed or not in the workforce will be eligible for the credits.

The majority -- 56 percent -- of those eligible for the cuts will be insured, according to the study. Of those, 37 percent will have insurance from an employer.

Workers who contribute more than 8 percent of their household income will be eligible to instead buy their insurance through an exchange and will be eligible for the tax credits.